Are you ready for the year 2021?
It’s been full of events for the year 2020. Started off with covid-19, trade war, US presidency election. The US GDP drop 32.9%, the S&P 500 index drop around 30%, and the oil price went into crisis. It has been a very volatile year in 2020, will the year 2021 continue its volatility? Here are a few tips for you to get ready for the year 2021 so that regardless of how the market fluctuates your investment capital still gets protected.
- Review your trading strategy
It is time to review your performance and strategy. If your strategy is not working well even after 30 to 50 trades. It is time to change. A good strategy should give you a decent result after 50 trades.
The market has been very volatile for the year 2020, for 2021 you may consider a more robust strategy. Some strategy good during a certain period of time, for example, trend following works best during trending however it will suffer drawdown during the ranging period. Therefore, it is important to understand if your strategy able to withstand the volatile period, if not you suffer a huge drawdown.
- Make sure you stick to good money management rule
Good money management will defiantly help during the drawdown period or handling an unexpected event. It is a good practice to constantly review your money management strategy so that you can handle a volatile market.
You definitely do not want to have a 1 month or 1 year to wipe off your investment account. It is not only losing money but wasted time and your hard work build up the profit in the account. Thus always stay defensive and always stick to your money management rule.
- Stay alert and don’t get greedy
Always stay alert for the events in the market, if there is any sudden event happen you can quickly liquidate all your position and stay in cash.
Staying alert not only to the external market factor is also on your own strategy so that you can make a quick decision. Do not be greedy and stick to your system.
Hopefully, some quick tips above will help you through the year 2021, and have a prosperous year ahead.